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No April Showers:Consumers Upbeat But Pay Worries Loom

The Consumer Confidence Index jumped to 92.9 from 88.5 in March, reflecting an upbeat mood based on an improved jobs picture.

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The Consumer Confidence Index jumped to 929 from 885 in April

The Consumer Confidence Index jumped to 92.9 from 88.5 in April.

Photo By WWD Staff

NEW YORK — Consumers were an optimistic bunch in April, giddy shoppers warmed by the job outlook.

But before popping the cork, retailers may want to consider the rising number of consumers who expect skinnier paychecks. Moreover, a recent research report says that apparel sales are in jeopardy, and suggests that this might be as good as it gets for retail.

The Conference Board on Tuesday said that the Consumer Confidence Index jumped to 92.9 from 88.5 inContinued from page one

April, reflecting an upbeat mood based on an improved jobs picture. Since last month’s number was unchanged from February, the increase in April definitely reflected a more positive consumer. Also gaining strength were the Present Situation Index, jumping to 90.6 from 84.4, and the Expectations Index, rising to 94.5 from 91.3.

Consumers’ optimism about the next six months, the board said, improved for the first time this year. Completing the forecast picture on optimism was a slight gain in the numbers for those expecting business conditions to improve, edging up to 20.5 percent from 19.5 percent last month. The month showed a corresponding dip to 9.3 percent from 9.7 percent for those expecting conditions to worsen.

Lynn Franco, director of the board’s Consumer Research Center, said in a statement, “The job market, which has a major impact on confidence, appears to be gaining strength. The percentage of consumers claiming jobs are hard to get is now at its lowest level since November 2002, and more consumers expect this trend to continue.”

While the employment outlook was more favorable, caution was in the air. Buried at the end of the board’s release, in the last sentence, was a notation that “Consumers anticipating an increase in their incomes declined to 17 percent from 18 percent last month.”

So was there improvement or not?

Maury Harris, chief economist at UBS, wrote in a research note, “An improving labor market had a disproportionately large positive impact on both the present situation and expectations components.”

He noted, “The UBS Index of Investor Optimism and the preliminary University of Michigan consumer sentiment index, which are less sensitive to labor market conditions, fell in April.”
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